A value-added tax (V.A.T.) of 17% is charged on all purchases and transactions except tourists' hotel bills and car rentals paid in foreign currency (cash, traveler's checks, or foreign credit cards). Upon departure, you’re entitled to a refund of tax on purchases made in foreign currency of more than NIS 400 (about US$100) on one invoice; but the refund isn’t mandatory, and not all stores provide V.A.T. return forms. Stores so organized display "tax refund for tourists" stickers, or you can inquire. Make sure you fill out the tax refund form.
Keep your receipts and the tax refund form, and ask for a cash refund at Ben Gurion Airport. Change Place Ltd. has a special desk for this purpose in the departures hall in Terminal 3. You also need to present the items you purchased.